FM403 One Unit
Management and Regulation of Risk
This information is for the 2025/26 session.
Course Convenor
Prof Martin Oehmke
Availability
This course is compulsory on the MSc in Finance and Risk. This course is not available as an outside option to students on other programmes. This course uses controlled access as part of the course selection process.
All students on a programme listed under the Course Availability will be given a place. The course is not capped.
Please contact finance.teachingmanager@lse.ac.uk with any queries.
This course does not permit auditing students.
Course content
This course introduces students to the foundational concepts and key issues in risk management, financial intermediation, and financial regulation.
The course covers (i) different aspects of market and non-market risk including their measurement and management and (ii) the nature the nature, fragility and regulation of financial intermediation. Specific topics covered include the purpose of risk management, risk measures (e.g., Value-at-Risk, Expected Shortfall), the institutional details of financial institutions and their special functions, and canonical models of financial intermediation (liquidity transformation, monitoring, private money creation). These models will serve as a foundation to understand and assess the regulation of banks and other financial market participants.
Teaching
60 hours of seminars in the Autumn Term.
Formative assessment
Students will be given weekly problem set assignments.
Indicative reading
Lecture Notes and additional course readings that will be made available on Moodle.
Additional background reading: J. Hull, Risk Management and Financial Institutions, 5th Edition, 2018; P Jorion, Value At Risk 3rd Edition 2006; (McGraw Hill); X Freixas and J-C Rochet, The Microeconomics of Banking 3rd Edition, 2023.
Assessment
Continuous assessment (100%)
The continuous assessment includes mandatory attendance of Deutsche Bank seminars in WT, and a substantial structured project due in August.
Key facts
Department: Finance
Course Study Period: Autumn Term
Unit value: One unit
FHEQ Level: Level 7
CEFR Level: Null
Total students 2024/25: 66
Average class size 2024/25: 66
Controlled access 2024/25: YesCourse selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Personal development skills
- Problem solving
- Communication
- Application of numeracy skills
- Commercial awareness
- Specialist skills